International Journal of Research in Business Studies and Management

Volume 6, Issue 4, 2019, PP 6-20

ISSN 2394-5923 (Print) & ISSN 2394-5931 (Online)

Assessment of Service Quality on Customer Satisfaction in

Ethiopian Insurance Corporation
Tegegne Alemayehu Beyene*
Lecturer at Wolaita Sodo University, Ethiopia
*Corresponding Author: Tegegne Alemayehu Beyene, Lecturer at Wolaita Sodo University, Ethiopia,
Email:tagealem08@gmail.com

ABSTRACT
Nowadays, service quality has received much attention because of its obvious relationship with customer
satisfaction and customer retention. Therefore, Service Quality improvement is key issue that determines the
very survival of the insurance company. The aim of this study was to assess service quality on customer
satisfaction in Ethiopian Insurance Corporation and to propose suggestion based on results of the study.
The study uses the descriptive form of research design and used primary and secondary data source.
Primary data was collected using survey questionnaires. Through employing convenience sampling methods
the populations of this study are all customers who receive services from the Southern Addis District
Ethiopian Insurance Corporation which have two branches; Saris Branch and Bishoftu Branch.
Accordingly, Sample size of 100 respondents is taken from each selected branch who has been using at list
one of the insurance types. The study identifies that reliability, responsiveness, prompt of service, behavior
of employees, availability of informative material, fulfillment of promises, sincerity in solving customers’
problems, personal attention to customers, and understanding the needs of the customer were key issues that
were below what customers would expect from the service provider, hence also dissatisfied. It appears that
customer satisfaction in the context of EIC is severely being affected by quite a number of factors, chief
among them is the slow speed in terms of service provision and the time they take to respond to customer
service issues. As a recommendation it is advisable to EIC to address the challenges indicated and also need
to maximize on the opportunities that the company can get by properly implementing the right strategy to get
customers satisfied. Since EIC is the pioneer Insurance Corporation in Ethiopia and most of the customers
had been customers for the Corporation for long, the Corporation must use this opportunity for its efficiency
and effectiveness.
Keywords: Service quality, customer satisfaction, Insurance, service Quality dimension

INTRODUCTION penetration levels. There are an estimated 3

Million formal insurance clients in Ethiopia. As
Customer satisfaction has become a very per the data obtained from National Bank of
important concept in recent years. The Ethiopia (NBE), insurance premiums, including
importance of customer satisfaction cannot be life and general insurance, totaled approx. ETB
ignored in both the products and services. 4.9 Billion in the 2013/2014 financial year
Quality of services has the power to create representing merely 0.56% of GDP. Currently,
customer satisfaction.Service quality is critical 17 insurance companies are operating in the
particularly for the growth and development of country with a total of 265 branches throughout
service sector business enterprises (Juran, 1988). the country.
Service quality is an important antecedent of
customer satisfaction, (Zeithaml and Bitner, Figures indicate that Ethiopia‟s insurance sector
2003; Andaleeb and Conway, 2006). The is skewed towards corporate clients who insure
deliverance of quality services to customers is their assets (motor vehicle, buildings,
the competitive advantages of any service warehouse, stocks and other properties),
giving companies, Parasuraman, et al. (1985). business (aviation, engineering) and insurance
The quality of services offered by a company of the person (accident, health, workmen‟s
determines the customer satisfaction and long compensation).
term loyalty (Naik et al. 2010).Ethiopia‟s As per the data obtained from NBE, General
insurance industry is relatively undeveloped insurance premium dominates the sector with
which is exemplified by the sectors low 93.8% premium market share leaving the

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Assessment of Service Quality on Customer Satisfaction in Ethiopian Insurance Corporation

balance to Life insurance business (NBE 2014). capital aiming the following objectives. Engage
The competition existing in the insurance in all classes of insurance business in Ethiopia;
industry is a cutthroat competition and it is
 Ensure the insurance services reach the broad
based on price and Service Quality is another
mass of the people;
and major area of competition.
Subject to the provision of Article 18 of the
Various strategies are formulated to retain the
Housing and Saving Bank establishment
customer and the key of it is to increase the
proclamation No. 60/1975, promote efficient
service quality level. Service quality is
utilization of both material and financial
particularly essential in the insurance services
resources.EIC was operating the business for
context because it provides high level of
about nineteen years under protected
customer satisfaction, and hence it becomes a monopolistic system as state owned-sole
key to competitive advantage. Nowadays, insurer. After the demise of the Marxist regime
service quality has received much attention in mid-1991 a fundamental change has taken
because of its obvious relationship with place and there was a shift in political, economic
customer satisfaction and customer retention. and social orientation from totalitarianism to
Therefore, Service Quality improvement is key that of liberalism. Therefore, EIC was re-
issue that determines the very survival of the established as public enterprise under
insurance company. proclamation number 201/94 with Birr 61
Statement of the Problem million (USD 7.13 million) paid up capital.
In the insurance industry, offering quality Upon re-establishment of the Corporation in
services is very significant to create closer 1994 as state owned enterprise, the law covers
attachment with the entire customers. The issue the following new objectives to the Corporation:
of quality service is becoming a global concern  Engage in the business of rendering
that demands continuous improvement to fit the insurance services;
unbalanced environment and changing customer
needs. Quality of services has the power to  Engage in any other related activities
create customer satisfaction and making them conducive to the attainment of its purposes.
loyal. On the other hand poor quality of services However, in order to maximize the benefit from
results in customer dissatisfaction and customer their investments decisions, the Insurance
defection by going to other competitors. In managements should have an insight on the
reality one satisfied customer tells only to one dimensions of service quality, objectively
person but a dissatisfied customer tells nine measure the service quality using elements of
other people about the problem. Creating service quality dimensions, and understand the
customers satisfaction includes prompt and relationship of the dimensions with customer
effective response and solutions to their needs satisfaction. This study therefore, explores the
and desires as well as building and maintaining service quality at Ethiopian Insurance
good relationships.Insurance sector is one of the Corporation from the customers‟ perspectives
most important entities which have been by assessing the service quality and its influence
growing relatively in the past decade in on customers‟ satisfaction.
Ethiopia. At present there are seventeen
insurance companies operating in the market Objective of the Study
and there is fierce competition among The general objective of this research was to
themselves. With a greater choice and an assess service quality on customer satisfaction
increasing awareness, there is a continuous in Ethiopian Insurance Corporation and to
increase in the customers‟ expectations and they propose suggestion based on results of the
demand better quality service. Therefore, to study. While the specific objectives tried to
sustain in the market, service quality becomes address by conducting this research were.
the most critical component of competitiveness
for insurance companies in Ethiopia. Ethiopian  To assess customers‟ perception and
Insurance Corporation (EIC) was established in expectation using reliability, tangibles,
1976 by proclamation No.68/1975. The assurance, empathy and responsiveness
Corporation came into existence by taking over dimensions in the case of Ethiopian
all the assets and liabilities of the thirteen Insurance Corporation.
nationalized private insurance companies, with  To assess the effects of tangibles, reliability,
Birr 11 million (USD 1.29 million) paid up assurance, empathy and responsiveness

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Assessment of Service Quality on Customer Satisfaction in Ethiopian Insurance Corporation

dimension of service quality and the Moreover, secondary data was also used to
customer satisfaction at Ethiopian Insurance understand the literatures produced in the area.
Corporation. In addition publications and reports produced by
the insurance company were also used to
 To assess customers satisfaction on the
conduct this research.
service provided by Ethiopian Insurance
Corporation. However, the researchers cannot manage the
interview for the planned population was too
Research Questions
busy to meet due to their daily activity.
 What are the customers‟ perceptions and Sampling Method and Sample Size
expectations on the Ethiopian Insurance
Corporation service quality in terms of the The populations of this study are all customers
five service quality dimensions? who receive services from the Southern Addis
District Ethiopian Insurance Corporation which
 What are service tangibility, reliability, have two branches; Saris Branch and Bishoftu
assurance, empathy and responsiveness and Branch. The study used convenience sampling
customer satisfaction looks like in Ethiopian methods to select the sample from the available
Insurance Corporation? population.
 How does the corporation achieve The researchers decides to employ convenience
improvements in service quality to enhance sampling method because it is actually
customer satisfaction? impossible to carry on a probability sampling
RESEARCH METHODOLOGY because there is no point in time during which
all customers are available due to different
Research Design and Methodology reasons and it is not possible to contact
The researchers decided to use the descriptive everyone who may be sampled.
form of research design to provide solutions to In these two branches there are about 122,385
the research problems. Descriptive research total customers. To determine the sample size, a
involves gathering data that describe events and simplified proven formula of (Yamane, 1967)
then organizes, tabulates, depicts, and describes would be applied. That is,
the data collection. Because the human mind
cannot extract the full import of a large mass of n= N
raw data, descriptive statistics are very 2
1 + N (e)
important in reducing the data to manageable
form. (Glass & Hopkins, 1984). n= Sample size
So in this researcher the descriptive research N= Total of population
design was employed which aim at providing e= Sampling error (10%) at 95% of level of
answers to questions such as who, what and how confidence
part of the topic.
n= 122,385 = 99.92 =100
Data Collection Instruments
1+122,385(0.1)2
For the proper achievement of the objectives of
the study; the researchers was used primary and Accordingly, Sample size of 100 respondents is
secondary data source. Primary data was taken from each selected branch who has been
collected using survey questionnaires. using at list one of the insurance types.
Questionnaires were distributed to the customers Method of Data Analysis
of the insurance company at selected branches
during the service hours to customers visiting Both qualitative and quantitative methods of
the branch. The variables was attitudinal and data analysis have been employed here. After
was measured using five point Likert-scales was the questionnaires were collected, the researcher
used for expectation of customers Very was exploring the level of customers‟
dissatisfied, Dissatisfied, Neutral, Satisfied and satisfaction towards service quality of EIC in
Very satisfied for perception of customers and five areas: tangibility, reliability, responsiveness,
strongly disagree, disagree, normal, agree and assurance, and empathy.
strongly agree. The use of Likert scale is to Therefore, data was analyzed through narrating
make it easier for respondents to answer and interpreting the situations deeply and
question in a simple way. contextually. Quantitative data were analyzed

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Assessment of Service Quality on Customer Satisfaction in Ethiopian Insurance Corporation

and presented using tables, frequency and along the quality as a function of the differences
percentages to give clear understanding of the between expectation and performance along the
issue quantitatively. quality dimensions.
LITERATURE REVIEW Cronin and Taylor (1994) viewed service
Service quality as a form of attitude representing a long
run overall evaluations. Maintaining service
Comprehensive definition of services as defined quality at certain level and improving service
by Groonros (1984) is that "an activity or series quality must be an effort to those companies
of activities of a more or less intangible nature who desire life-time prosperity in customers‟
than normal, but not necessarily, take place in heart.
the interaction between the customer and the
service employees and/or physical resources or Scholars generally agree that quality is
goods and/or systems of the service provider, associated to the value of a product offering
which are provided as solutions to customer which could either result in satisfaction or
problems". dissatisfaction on the part of the individual.
Characteristics of Service Customer expectations are beliefs about a
According to Kottler (1996) and Regan (1963) service that serve as standards against which
services have four major characteristics service performance is judged, which customer
Intangibility thinks a service provider should offer, rather
than on what might be on offer (Parasuram et
Regan (1963) introduced the idea of services al., 1988). To some, service quality can also be
being activities, benefits or satisfactions which defined as the difference between customer‟s
are Services offered for sale, or are provided in expectations for the service encounter and the
connection with the sale of goods. perceptions of the service received. According
Services are intangible unlike physical products, to the service quality theory, it is predicted that
they cannot be seen, tasted, felt heard or smelled customers will judge that quality as ` low` if
before they are bought. performance does not meet their expectations
Inseparability and quality as `high` when performance exceeds
Services are typically produced and consumed expectations. Closing this gap might require
simultaneously. This is not true of physical toning down the expectations or heightening the
goods that are manufactured, put into inventory, perception of what has actually been received by
distributed through multiple resellers and the customer (Parasuraman et al., 1985).
consumed still later. Consumer Satisfaction
Variability Solomon (2009) describes a customer as the
Services are highly variable, since they depend most crucial stakeholder of an organization who
on who provides them and when and where they provides payment in exchange for product
are provided. Service firms can take the offering provided to him/her by the organisation
following three steps to help manage service with a goal of satisfying a need and eventually
variability. The first one is providing employee maximizing satisfaction of the same. While
incentives that emphasize quality; secondly there is no any agreement between scholars on
standardizing the services performance process the definitions of a consumer and a customer,
throughout the organization. Finally, this research is will go by Solomon (2009) who
monitoring customer satisfaction through defines a customer as an individual who does
suggestion & complaint systems, customer the purchasing of a product offering as
surveys and comparison shopping can enable to compared to the consumer who finally uses the
eliminate and correct poor customer service. product.
Perishability Kotler and Keller (2009) define satisfaction as
In general, services cannot be stored and carried the feeling of delight or dissatisfaction that
forward to a future time period. Services are results from comparing a product‟s perceived
item -dependent and item- important which performance with its expectations. Therefore, it
make them very perishable. is generally thought that satisfaction could be
Service Quality the enjoyment that one derives from the usage
Parasuraman, Zeithmal and Berry (1985) of products and services provided and customer
defined services quality as a function of the pleasure is an indication of consumer
differences between expectation performance satisfaction. Furthermore, Tse and Wilton

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Assessment of Service Quality on Customer Satisfaction in Ethiopian Insurance Corporation

(1998) define consumer satisfaction as the support the relationship between customer
perceived discrepancy between previous retention and the quality of service experienced
expectations and the real performance of the by the customer.
product or service as perceived after its usage, Reich held and Kenny (1990) specified six
hence they consider satisfaction as a post- factors as imperative to improving retention:
purchase evaluation by the consumer. There is, senior management commitment; a customer –
however, a lack of coherence among scholars on focused culture in which all employees and
just what constitute customer satisfaction. managers focused their full attention on
Suresh chander et al. (2002) concur that customer satisfaction, retention information
consumer‟s level of satisfaction is determined systems that tracked and analyzed the root
by one is cumulative understanding at the point causes of defections; empowerment of front line
of contact with the service provider. employees to take actions that provided
Satisfaction refers to the contentment that an immediate customer satisfaction; continuous
individual feels whenever his/her desires have training and development and incentive systems
been fulfilled or needs, objectives or based on customer retention. Parasuraman, et al.
expectations have been achieved. Satisfied (1984) studied quality service delivery in four
customers have a greater likelihood of service businesses including credit card
remaining loyal, would consume more of services, and developed a model of service
services of the business organisation, and would quality. They noted that: “A variety of factors,
recommend friends and relatives to the service including resource constraints, management
provider. Therefore, customer satisfaction is the perceptions of consumer expectations and the
enjoyment obtained from consuming a service firm‟s service quality specifications will affect
offered. Measuring the effect of service quality service quality from the consumer‟s viewpoint”
on the satisfaction of customers could be very (Parasuraman, et al; 1984).
difficult at times because it is an effort to Parasuraman, et al. (1984) identified a set of
determine how human being beings feel. NBRI, discrepancies, or gaps, between how executives
2009 suggests that the probable measurements perceive the quality of the service they provide
that can be used in measuring satisfaction of a and the tasks associated with delivering those
consumer consist of: services to customers. They found that the
 Quality of service customer‟s perception of service quality
 Speed of service depends upon the size and direction of the gap
between the service the customer expects to
 Pricing receive and what he or she perceives to have
 Complaints or problems been received.
 Trust in employees The magnitude of this gap (which can be either
positive or negative) was determined by four
 The closeness of the relationship with interrelated variables; the difference
associates in the firm
 Between actual consumer expectations and
 Other kinds of services needed and management perceptions of those
expectations;
 The positioning of the company in the minds
of the customers (NBRI, 2009)  Between management perception of
expectations and the translation of those
Service Quality and Customer Satisfaction perceptions into service quality
It is believed that customers who are satisfied specifications;
with the perceived quality of service they get  Between service quality specifications and
will have a favorable emotional response, which service delivery; and
is customer satisfaction.
Westbrook and Reilly (1983) suggested that  Between both service quality specifications
customer satisfaction is an emotional response and service delivery, and the external
to the experiences provided by and associated communications to customers.
with particular product purchased or services Service Quality Dimensions
provided. Furthermore, studies such as Reich When evaluating service quality, consumer
held and Kenny, (1990); Zeithaml, et al, (1990); examines five dimensions; tangibles, reliability,
Bowen and Lawler, (1990); and Schlesinger and responsiveness, assurance and empathy
Heskett, (1991) have also found results that (Parasuraman et al, 1985).

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Assessment of Service Quality on Customer Satisfaction in Ethiopian Insurance Corporation

Tangibles On the other hand the age between 18-30

Physical evidence of the service; physical accounts for 12 (12%), 31-40 accounts for 20
facilities, tools and equipment; appearance of (20%), 51-60 accounts for 15 (15%) and above
providers; appearance of other customers in the 61 age group found to be 14 (14%).
service facility are the tangibles Form these data we can see that the majority
Reliability user of insurance service are active age groups
Consistency of performance and dependability; which have the capacity to change the economy
performs service right at the first time; honors of the country in terms of power and experience.
its promises; keeps accurate records, corrects Table4.2. Age composition of respondents
billing, and performs services at the designated Age group Total number Percent of
times are the parameters of reliability. respondent
Responsiveness 18-30 12 12%
Itis the willingness of the firm‟s staff to help 31-40 20 20%
customers and to provide them with prompt 41-50 39 39%
51-60 15 15%
service. Readiness to provide the service;
Above 60 14 14%
timeliness and setting up appointments promptly
Total 100 100%
are the symptoms of responsiveness.
Source:Survey Data
Assurance
The following table give consideration for the
Knowledge, competence and courtesy of marital status of the respondents and
employees; trust and confidence; required skills accordingly, the majority around 80 (80%) of
and knowledge; politeness, respectfulness, the respondents are married. Divorced, widowed
considerate, friendliness; trustworthiness, and single accounts for 8 (8%), 7 (7%), and 5
believability, honesty are signs of assurance. (5%) respectively. There is no respondent give
Empathy an answer for separated.
Caring; individualized attention, approachability, Table4.3. Marital status of respondents
easiness of contact; effort in understanding the Status Total Number Percent of respondents
customers‟ needs are signs of empathy. Single 5 5%
Married 80 80%
Convenience Divorced 8 8%
The availability of offices near to customer, toll- Widowed 7 7%
free numbers, websites, easy to get information Separated - -
and so on (Fujun Lai et al, 2007). Total 100 100%
DATA ANALYSIS Source: Survey Data

Demographic Characteristics In an attempt done to know the level of

education of the respondents the number and
As stated in the following table the majority of percent of respondents having master‟s degree
the sample concerning to their sex are male. Out and above accounts for 27 (27%) and there is no
of 100 people considered as a sample around 75 respondents how replay as only achieved the
(75%) are male and around 25 (25%) are female secondary level of education (9-12) grade.
respondents. Around 12 (12%) responds as the holders of
This may indicate that males are actively certificate, 22 (22%) diploma holders and the
participants of insurance and still there is a gap rest 39 (39%) responds as they have finished
in case of women in using insurance service and their Bachelor Degree.
some women are users through their husbands. Table4.4. Educational level of the respondents
Table4.1. Sex of respondents Level of education Total Percent of
number respondents
Sex Total Number Percent of respondents High school (9-12) only - -
Male 75 75% Certificate 12 12%
Female 25 25% Diploma 22 22%
Source: Survey Data Bachelor Degree 39 39%
Master‟s Degree and 27 27%
As discussed in the table 4.2 the age
above
characteristics of the respondents the majority of Total 100 100%
the samples age are between 41-50 and accounts
for 39 (39%). Source: Survey Data

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There is also an attempt done to know the became low. Then, the response of sample
customers relationship with (length of customer indicate that there is no person who have less
ship years) in the Ethiopian insurance than 1000 birr, 17 (17%) have the premium
corporation. The purpose of this question is to amount between 1001-5000 Birr, 32 (32%)
identify how much the customer is experienced between 5001-10,000 and the majority of the
in the service provided in by the Ethiopian respondents 51 (51%) have above 10,001 Birr.
insurance corporation. Accordingly, the data Table4.7. Premium amounts of respondents
shows that majority of the sample 53 53%) are Premium amount Total Percent of
more experienced with the service of Ethiopian in Birr Number Respondents
insurance corporation since the length of their Less than 1000 - -
relation to the insurance is more than 3 years. 1001-5000 Birr 17 17%
As depicted here around 13 (13%) are less than 5001-10,000 Birr 32 32%
1 year, 14 (14%) between 1 to 2 years and Above 10,001 Birr 51 51%
around 20 (20%) are between 2 to 3 have three Total 100 100%
years of relationship experience. So, more or Source: Survey Data
less the majority since majority of the sample Customers Expectation on the Service Provided
are more experienced in the service provided in at any Excellent Insurance Company
EIC they know the positive and negative part of There are five dimensions of quality service
the service afforded. considered in this section i.e Tangible,
Table4.5. Years of relationship with the EIC of the Reliability, Responsiveness, Empathy and
respondents Assurance. There is an intension that if the
Category of years Total Percent of expectation is high and service provided may be
number respondents below the expected it results in the
Less than 1 year 13 13% dissatisfaction of customer. Under each
1-2 years 14 14% dimensions of service quality different issues
2-3 years 20 20% raised and discussed to know expectation of
Above 3 years 53 53% customers on the quality of service provided in
Total 100 100% any excellent insurance company. So,
Source: Survey Data concerning about the expectation of customer on
Concerning to the occupation of the respondents the importance of tangibles, in an attempt to
about 57 (57%) are self-employed meaning they know expectation on access of information on
are owners of their business and company. The customer satisfaction from excellent insurance
remaining number and percent of sample are 7 company the respondents replied as strongly
(7%) retired and 36 (36%) are salaried means disagree none, disagree none, neutral none, 42
they are employed in different institutions (42%) agree and 58 (58%) strongly agree on the
governmental, non-governmental and private importance of it. Concerning about visually
sector. None of the respondent give an answer attractive bureau, materials and equipment‟s
of other concerning to the occupation. likes, strongly disagree none, disagree 6 (6%),
Table4.6. Occupation of respondents neutral 3 (3%), agree 48 (48%), strongly agree
Occupation Total Number Percent of 43 (43%) as it is important. On other hand there
type Respondent is also a concern about the importance of staff
Salaried 57 57% member‟s attractiveness and professionalism on
Self-employed 7 7% the service customers expect to gain quality
Retired 36 36% service and accordingly, none of the respondents
Others - - give answer for strongly disagree, none
Total 100 100% disagree, none neutral. But, 4 (4%) customer‟s
Source: Survey Data replied as they are agree and about 96 (96%)
As discussed in the table 4.7 the premium respond as they are strongly agree on it.
amount (Birr) of respondents in the Ethiopian Totally concerning about tangibles about
Insurance Corporation was analyzed. 65.67% of the population strongly agree,
This is because to know level of consideration 31.33% agree 2% disagree 1% neutral and none
the respondents have concerning to the service the respondent strongly disagree on its
provided, meaning the person who have highest importance on the customer satisfaction.
premium may have the high level of Concerning about the expectation of customers
consideration and adversely if the premium on the importance of reliability, issues raised
amount low the level of consideration also and discussed are, ability to deliver service

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Assessment of Service Quality on Customer Satisfaction in Ethiopian Insurance Corporation

timely, able to keep its promise, dependable and effort to provide zero defect of service for its
consistent in solving customer‟s complaints and customers.
Table4.8. Customer’s expectation on the Tangibles
Tangibles SD D N A SA Total
Excellent Insurance company can able to give access to information - - - 42 58 100
about its service offerings to its customers
Excellent Insurance company has visually attractive offices, equipment, - 6 3 48 43 100
and materials
Appearance of Excellent Insurance company‟s Staff is attractive and - - - 4 96 100
professional
Total - 6 3 94 197 300
Percent 2 1 31.33 65.67 100
Source: Survey Data
Accordingly concerning to ability to provide importance of keeping its promise of an
service timely, all of the respondents cannot excellent insurance company for its customer on
response for strongly disagree, disagree and quality service. But all respondents 100%
neutral. So, the majority of the respondents response that strongly agree concerning
about 98 (98%) respond as they are strongly dependable and consistent in solving customer‟s
agree and only 2 (2%) answer agree. In the same complaints. In relation to effort of providing
sense concerning to ability to keep promise none zero defective of service the response looks like,
of the respondents strongly disagree, disagree strongly disagree none, disagree 7 (7%), neutral
and neutral. And 13 (13%) of the respondents 16 (16%), agree 33 (33%), and the remaining 44
agree and 87 (87%) strongly agree with the (44%) respond strongly agree on its importance.
Table4.9. customer’s expectation on the Reliability
Reliability SD D N A SA Total
Excellent Insurance company is able to deliver services timely - - - 2 98 100
Excellent Insurance company is able to keep promises to its customers - - - 13 87 100
Excellent Insurance company is dependable and consistent in solving - - - - 100 100
customers‟ complaints
Excellent Insurance company always insists on zero defects in its service - 7 16 33 44 100
offerings
Total - 7 16 48 329 400
Percent - 1.75 4 12 82.25 100
Source: Survey Data
In other dimensions of quality service the with the statement. In relation to providing
concern was given to responsiveness and in prompt service and attending customers‟ needs
detail informing customers when service will none of the respondents strongly disagree,
provide, providing prompt services and disagree and neutral and 89 (89%) and 11 (11%)
attending to customers‟ needs and willingness of responds strongly agree and agree respectively.
employees in helping customers in the To last concerning responsiveness dimension of
emergency situation was gain a prime attention. service quality an attention was given for
As the data collected during questionnaire willingness of employees in helping in the
concerning to giving information to customers emergency situation, none of the respondents
when service will provided, about 71 (71%) of strongly disagree, disagree as well as neutral.
the respondents strongly agree, 26 (26%) agree, But, 93 (93%) and 7 (7%) says strongly agree
3 (3%) responses as they are neutral and none of and agree respectively.
the respondents disagree or strongly disagree
Table4.10. customer’s expectation on the Responsiveness
Responsiveness SD D N A SA Total
Excellent Insurance company is able to tell its customers when services will be - - 3 26 71 100
performed
Excellent Insurance company is able to provide prompt services and attends to - - - 11 89 100
customers‟ needs
Excellent Insurance company employees are willing to help customers in - - - 7 93 100
emergency situation
Total - - 3 54 253 300
Percent - - 1 18 84.3 100
Source: Survey Data

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Accordingly, the response of approachable and (6%) strongly agree and agree to it respectively.
easy to contact technical support of the company Inconsideration of convenient operating time 86
staff none of the respondents strongly disagree (86%) of respondents strongly agree and 14
and disagree. About 73 (73%) strongly agree, 23 (14%) agree. But no one disagree, strongly
(23%) agree and 4 (4%) neutral. Concerning to disagree and neutral. In case of staff members
ability of the company to communicate its personal service and giving time for customers
customers effectively, none of the respondents help none of respondents strongly disagree,
strongly disagree, disagree and neutral. The disagree and neutral. Around 89 (89%) responds
majority of the respondents 94 (94%), and 6 strongly agree and 11 (11%) agree.
Table4.11. Customer’s expectation on the Empathy
Empathy SD D N A SA Total
Excellent Insurance company‟s technical support staff is - - 4 23 73 100
approachable and easy to contact
Excellent Insurance company has ability to communicate effectively - - - 6 94 100
with their customers
Excellent Insurance company has convenient operating times - - - 14 86 100
The Excellent Insurance company‟s staff always give me a personal - - - 11 89 100
service and give me time for help
Total - - 4 54 342 400
Percent - - 4 13.5 86.5 100
Source: Survey Data
Lastly an attempt was done to know expectation agree and the rest 87 (87%) strongly agree. In
of customers concerning about Assurance. To the case of knowledge and skill of employees in
understand more and got clear idea of it points solving problems 91 (91%) strongly agree, 9
raised here, ability to fix problems timely (9%) agree and none strongly disagree, disagree
without delay, knowledge and skills of staff and neutral. Concerning to ability to provide
members in solving problems, ability to provide quality service 85 (85%) strongly agree and 15
quality of service and innovativeness and effort (15%) agree. But no one strongly disagree,
to improve quality of service are the major ones. disagree or neutral. Lastly for the expectation of
Concerning to ability to fix problems timely innovativeness effort of the company to improve
without delay, none of the respondents strongly service quality the whole respondent‟s 100%
disagree, disagree and neutral. About 13 (13%) responds as they are strongly agree.
Table4.12. Customer’s Expectation on the Assurance
Assurance SD D N A SA Total
Excellent Insurance company is able to fix problems timely without - - - 13 87 100
delay
In Excellent Insurance company Employees have knowledge and - - - 9 91 100
skills in solving my problems
Excellent Insurance company has got ability to provide quality - - - 15 85 100
service
Excellent Insurance company is innovative and struggle to improve - - - - 100 100
its service quality
Total - - - 37 363 400
Percent - - - 9.25 90.75 100
Source: Survey Data
Customers Experience on the Service Provided Responsiveness, Empathy and Assurances by
at any Ethiopian Insurance Corporation raising and discussing different issues under
them one by one. The question was designed
In this section there is an attention to know the
based on the questions raised to know the
customers experience from Ethiopian Insurance
expectation of customers.
Corporation from the angel of their expectation.
This aims to understand the service provided by Accordingly the first consideration was given
Ethiopian Insurance Corporation was as for tangibles. In this, access of information
expected or not, based on the five dimensions of provided by EIC in its service offering, visually
service quality i.e Tangible, Reliability, attractive office, equipment‟s and materials of

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Assessment of Service Quality on Customer Satisfaction in Ethiopian Insurance Corporation

EIC and Appearance of EIC‟s Staff is attractive appearance of staff attractiveness and
and professional are the major considerations. In professionalism 6 (6%) strongly disagree, 23
the case of access to information to its (23%) disagree, 33 (33%) neutral, 29 (29%)
customers for the service provided about 11 agree and 9 (9%) strongly agree.
(11%) strongly disagree, 16 (16%) disagree, 8
In general the data gathered concerning quality
(8%) neutral, 39 (39%) agree and 26 (26%)
of service provided for customers in relation to
strongly agree with the premises stated. In
tangibles shows that out of total respondents,
connection to owning visually attractive office,
10% strongly disagree, 16% disagree, 19.3%
equipment‟s and materials 13 (13%) strongly
neutral, 36.7% agree and the rest 18% strongly
disagree, 9 (9%) disagree, 17 (17%) neutral, 42
agree to statements standing from their
(42%) agree and the remaining 19 (19%) give a
experience.
response of strongly agree. In the case of
Table4.13. The experience of customers of EIC on tangibles
Tangibles SD D N A SA Total
EIC can able to give you access to information about its service offerings 11 16 8 39 26 100
to its customers
EIC has visually attractive offices, equipment, and materials 13 9 17 42 19 100
Appearance of EIC‟s Staff is attractive and professional 6 23 33 29 9 100
Total 30 48 58 110 54 300
Percent 10 16 19.3 36.7 18 100
Source: Survey Data
In the case of reliability dimension of service the respondents neutral, 34 (34%) agree and the
provided in EIC to understand and explore the remaining 23 (23%) strongly agree. In the
experience of customers the issues raised like question raised to understand the dependable
can EIC is able to deliver services timely, EIC and consistent of EIC in solving customer‟s
have to keep promises to its customers, is EIC complaints about 53 (53%) disagree, 22 (22%)
dependable and consistent in solving customers‟ strongly disagree, 3 (3%) neutral, 11 (11%)
complaints and can EIC always insists zero agree and 11 (11%) strongly agree.
defects in its service offerings are the
In connection of effort to provide zero defect of
discussable ones.
service about 56 (56%) strongly disagree, 19
As the information from data gathered (19%) disagree, 13 (13%) neutral, 5 (5%) agree
illustrated in the following table, in relation to and 7 (7%) strongly agree. Totally, the
delivering service timely most of the respondent‟s response in consideration to
respondents are strongly disagree counting Reliability concerning quality of service
around 48 (48%) strongly disagree and the rest provided at EIC Corporation the majority of
of respondents 12 (12%) disagree, 2 (2%) respondents 47.25% strongly disagree, 19.75%
neutral, 29 (29%) agree and 9 (9%) strongly agree, 16% disagree, 12.5% strongly agree and
agree. In keeping its promise about 32 (32%) 4.5 neutral in their experience of service gained.
strongly disagree, 11 (11%) disagree, none of
Table4.14. The experience of customers of EIC on Reliability
Reliability SD D N A SA Total
EIC is able to deliver services timely 48 12 2 29 9 100
EIC is able to keep promises to its customers 32 11 - 34 23 100
EIC is dependable and consistent in solving customers‟ complaints 53 22 3 11 11 100
EIC always insists on zero defects in its service offerings 56 19 13 5 7 100
Total 189 64 18 79 50 400
Percent 47.25 16 4.5 19.75 12.5 100
Source: Survey Data
The other dimensions of quality service customers in the emergency situation are prime
concerned was given to responsiveness and in attention. As the data collected during
detail can EIC inform to its customers when questionnaire concerning to giving information
service will provided, can EIC provide prompt to customers when service will provided, about
services and attends to its customers‟ needs and 31 (31%) of the respondents strongly disagree,
the willingness of EIC employees in helping 26 (26%) disagree, 3 (3%) neutral, 24 (24%)

15 International Journal of Research in Business Studies and Management V6 ● I4 ● 2019

Assessment of Service Quality on Customer Satisfaction in Ethiopian Insurance Corporation

agree and 16 (16%) strongly agree responses situation, 44 (44%) strongly disagree, 33 (33%)
with the statement. In relation to providing disagree, 11 (11%) neutral, 9 (9%) agree 3 (3%)
prompt service and attending the customers says strongly agree. Generally the dimension of
need, EIC customers‟ response likes 42 (42%) responsiveness the customer of EIC agreement
strongly disagree, 33 (33%) disagree, 21 (21%) on the premises stated likes, 39% strongly
neutral, 4 (4%) agree and none responds disagree, 30.76% disagree, 11.67% neutral,
strongly agree. In willingness of employees of 12.33% agree, and 6.33% strongly agree.
EIC in helping the customers in the emergency
Table4.15. The experience of customers of EIC on Responsiveness
Responsiveness SD D N A SA Total
EIC is able to tell its customers when services will be performed 31 26 3 24 16 100
EIC is able to provide prompt services and attends to customers‟ needs 42 33 21 4 - 100
EIC employees are willing to help customers in emergency situation 44 33 11 9 3 100
Total 117 92 35 37 19 300
Percent 39 30.67 11.67 12.33 6.33 100
Source: Survey Data
In the case of Empathy dimension of service about 42 (42%) strongly disagree, 23 (23%)
provided in EIC to understand and explore the disagree, 26 (26%) neutral, 7 (7%) agree and the
experience of customers the issues raised like, remaining 2 (2%) strongly agree. In the question
EIC‟s technical support staff is approachable raised to understand the convenient operating
and easy to contact, EIC has ability to times of EIC about 53 (53%) disagree, 28 (28%)
communicate effectively with their customers, strongly disagree, 10 (10%) neutral, 6 (6%)
EIC has convenient operating times, The EIC‟s agree and 3 (3%) strongly agree. In connection
staff always give me a personal service and give of The EIC‟s staff always give me a personal
me time for help are ones gain attention. service and give me time for help, about 55
(55%) strongly disagree, 21 (21%) disagree, 11
As the information from data gathered
(11%) neutral, 8 (8%) agree and 5 (5%) strongly
illustrated in the following table, in relation to
agree. Totally, the respondent‟s response in
EIC‟s technical support staff is approachable
consideration to Empathy concerning quality of
and easy to contact most of the respondents are
service provided at EIC Corporation the
strongly disagree counting around 54 (54%)
majority of respondents 51% strongly disagree,
strongly disagree and the rest of respondents 22
23% disagree, 14% neutral, 7.5% agree and
(22%) disagree, 10 (10%) neutral, 9 (9%) agree
4.5% strongly agree in their experience of
and 5 (5%) strongly agree. EIC has ability to
service gained.
communicate effectively with their customers,
Table4.16. The experience of customers of EIC on Empathy
Empathy SD D N A SA Total
EIC‟s technical support staff is approachable and easy to contact 54 22 10 9 5 100
EIC has ability to communicate effectively with their customers 42 23 26 7 2 100
EIC has convenient operating times 53 28 10 6 3 100
The EIC‟s staff always give me a personal service and give me time for help 55 21 11 8 5 100
Total 204 94 57 30 15 400
Percent 51 23.5 14.25 7.5 3.75 100
Source: Survey Data
In an attempt to understand the assurance EIC is able to fix problems timely without
dimension of service provided in EIC to delay, most of the respondents are strongly
understand and explore the experience of disagree counting around 60 (60%) strongly
customers the issues raised like, EIC is able to disagree and the rest of respondents 20 (20%)
fix problems timely without delay, Employees disagree, 8 (8%) neutral, 7 (7%) agree and 5
of EIC have knowledge and skills in solving my (5%) strongly agree. Employees of EIC have
problems, EIC has got ability to provide quality knowledge and skills in solving my problems,
service, EIC is innovative and struggle to about 34 (34%) strongly disagree, 26 (26%)
improve its service quality are issues gain disagree, 18 (18%) neutral, 10 (10%) agree and
attention. As the information from data gathered the remaining 12 (12%) strongly agree. In the
illustrated in the following table, in relation to question raised to understand EIC has got ability

International Journal of Research in Business Studies and Management V6 ● I4 ● 2019 16

Assessment of Service Quality on Customer Satisfaction in Ethiopian Insurance Corporation

to provide quality service, about 33 (33%) agree. Totally, the respondent‟s response in
strongly disagree, 24 (24%) disagree, 34 (34%) consideration to Assurance concerning quality
neutral, 5 (5%) agree and 4 (4%) strongly agree. of service provided at EIC Corporation the
majority of respondents 45.5% strongly
In connection of The EIC is innovative and
disagree, 22.75% disagree, 17.75% neutral,
struggle to improve its service quality, about 55
7.5% agree and 6.5% strongly agree in their
(55%) strongly disagree, 21 (21%) disagree, 11
experience of service gained.
(11%) neutral, 8 (8%) agree and 5 (5%) strongly
Table4.17. The experience of customers of EIC on Assurance
Assurance SD D N A SA Total
EIC is able to fix problems timely without delay 60 20 8 7 5 100
In EIC Employees have knowledge and skills in solving my problems 34 26 18 10 12 100
EIC has got ability to provide quality service 33 24 34 5 4 100
EIC is innovative and struggle to improve its service quality 55 21 11 8 5 100
Total 182 91 71 30 26 400
Percent 45.5 22.75 17.75 7.5 6.5 100
Source: Survey Data
The Overall Customer Satisfaction in EIC dissatisfied, 6 (6%) neutral, 8 (8%) satisfied and
7 (7%) very satisfied. Concerning to EIC‟s
In the previous two sections there is an attempt
Services are very reliable, 22 (22%) very
to analyze the customers Expectation of quality
dissatisfied, 31 (31%) dissatisfied, 28 (28%)
service and experience or actual service
neutral, 10 (10%) satisfied and 9 (9%) very
provided in Ethiopian Insurance Corporation to
satisfied. In relation to question raised
understand whether the expectation of
concerning EIC‟s services meet your
customers fulfilled or not. But from the
expectations and you are satisfied, 49 (49%)
assessment made and analyzed descriptively
very dissatisfied, 34 (34%) dissatisfied, 14
there is a gap between expectation and actual
(14%) neutral, 3 (3%) satisfied and none of the
experience. These indicate that some of the
respondents very satisfied. Concerning the
dissatisfaction reviled in Ethiopian Insurance
technical quality of service of EIC is excellent,
corporation customers. In this section the overall
about 40 (40%) very dissatisfied, 32 (32%)
satisfaction of the customer was attempted to
dissatisfied, 18 (18%) neutral, 4 (4%) satisfied
know. The main aim of this section was
and 6 (6%) very satisfied. In relation to EIC‟s
assessing the satisfaction of EIC customers in
staff are very responsive the respondents
the service provided in the Ethiopian Insurance
response likes, 47 (47%) very dissatisfied, 14
Corporation. This assessment was based on the
(14%) dissatisfied, 24 (24%) neutral, 10 (10%)
premises raised and offered for customers
satisfied and the rest 5 (5%) are replied as they
through structured questionnaire Very
are very satisfied. And lastly in an attempt to
dissatisfied, Dissatisfied, Neutral, satisfied and
know whether there is value for money and time
Very satisfied. It based on, Services you have
in EIC‟s services, 39 39%) very dissatisfied, 12
received from EIC are the best services ever,
(12%) dissatisfied, 23 (23%) neutral, 20 (20%)
EIC‟s service delivery is done timeously, EIC‟s
satisfied and the rest 6 (6%) are very satisfied to
Services are very reliable, EIC‟s services meet
it. In general in an attempt to understand the
your expectations and you are satisfied, the
overall satisfaction of customers in services
technical quality of service of EIC is excellent,
provided at EIC out of total respondents only
EIC‟s staffs are very responsive, there is value
7% and 9.57% are very satisfied and satisfied
for money and time in EIC‟s services. As
respectively. The rest of the population, 41.57%
illustrated figuratively in the following table,
very dissatisfied, 23.7% dissatisfied and 18.16%
Services you have received from EIC are the
are neutral from the data collected using
best services ever, 36 (36%) very dissatisfied,
structured questionnaire and analyzed. This
22 (22%) dissatisfied, 14 (14%) neutral, 12
indicates that the overall satisfaction of
(12%) satisfied and 16 (16%) very satisfied. In
customer regarding to service quality in EIC
consideration of EIC‟s service delivery is done
more or less is goes to dissatisfaction.
timeously, 58 (58%) very dissatisfied, 21 (21%)

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Assessment of Service Quality on Customer Satisfaction in Ethiopian Insurance Corporation

Table4.18. The overall satisfaction of customers from EIC service.

Category VD D N S VS Total
Services you have received from EIC are the best services ever 36 22 14 12 16 100
EIC‟s service delivery is done timeously 58 21 6 8 7 100
EIC‟s Services are very reliable 22 31 28 10 9 100
EIC‟s services meet your expectations and you are satisfied 49 34 14 3 - 100
The technical quality of service of EIC is excellent 40 32 18 4 6 100
EIC‟s staff are very responsive 47 14 24 10 5 100
There is value for money and time in EIC‟s services 39 12 23 20 6 100
Total 291 166 127 67 49 700
Percent 41.57 23.7 18.16 9.57 7 100
Source: survey data
CONCLUSION AND RECOMMENDATION the slow speed in terms of service provision and
the time they take to respond to customer
Conclusion service issues.
The purpose of this study was to assess service
Recommendations
quality and customer satisfaction in the
Ethiopian Insurance Corporation. Data was In light of the analysis and conclusion, it is
obtained from a questionnaire given to 100 advisable to EIC to address the challenges
sampled customers at Southern Addis Ababa indicated and also need to maximize on the
district. Data collected from the survey opportunities that the company can get by
questionnaire was analyzed using descriptive properly implementing the right strategy to get
analysis based on five point Likert scale as, customers satisfied. Since EIC is the pioneer
Strongly Disagree, Disagree, Neutral, Agree, Insurance Corporation in Ethiopia and most of
Strongly Agree for expectation and perception the customers had been customers for the
and Very dissatisfied, Dissatisfied, Neutral, Corporation for long, the Corporation must use
Satisfied and Very satisfied for overall this opportunity for its efficiency and
satisfaction of customers. effectiveness. Furthermore, the following
recommendations are given to EIC as a way
Customer satisfaction is the major factor
forward in addressing its challenges and
contributing to the success of service sector. All
eventually to achieve customer satisfaction that
the service sectors depend on customers and will lead the company in to profitability.
their satisfaction and the Insurance companies
are no exception. One of the ways for achieving  EIC should be committed and involved in
high customer satisfaction and gaining the service quality improvement related
loyalty of customers is to offer high quality reliability, responsiveness, prompt of service,
services. behaviour of employees for all customers in
In this study, a case study survey using a order to meet or exceed their expectation.
structured questionnaire and quantitative data  Draw more customers by improving
analysis was used to assess service quality on customer service that makes them loyal to
customer satisfaction in the context of Ethiopian EIC. The corporation should assure the
Insurance Corporation. It was concluded that quality of its service in order to win
despite respondents being dissatisfied from EIC customers‟ satisfaction and consequently
as a service provider. It was noted that must be give consideration to availability of
reliability, responsiveness, prompt of service, informative material, fulfilment of promises,
behaviour of employees, availability of sincerity in solving customers‟ problems, to
informative material, fulfilment of promises, achieve a competitive advantage and long run
sincerity in solving customers‟ problems, survival.
personal attention to customers, and
understanding the needs of the customer were  Because customer satisfaction is found to be
key issues that were below what customers an important tool to create and maintain loyal
would expect from the service provider, hence a customers. These loyal customers contribute
dissatisfied. towards high repeated purchases.
It appears that customer satisfaction in the  As such it is a fundamental driver for
context of EIC is severely being affected by organizational performance and profitability
quite a number of factors, chief among them is EIC must be give consideration to speed of

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Assessment of Service Quality on Customer Satisfaction in Ethiopian Insurance Corporation

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Citation: Tegegne Alemayehu Beyene, “Assessment of Service Quality on Customer Satisfaction in

Ethiopian Insurance Corporation", International Journal of Research in Business Studies and Management”,
6(4), 2019, pp.6-20.
Copyright: © 2019 Tegegne Alemayehu Beyene. This is an open-access article distributed under the terms
of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction
in any medium, provided the original author and source are credited.

International Journal of Research in Business Studies and Management V6 ● I4 ● 2019 20